Centene Targets Medicaid Turnaround After $6.7 Bn Loss in 2025

CEO Sarah London said the company is “laser-focused” on restoring sustainable profitability in Medicaid while maintaining quality outcomes.

Centene Corporation is intensifying efforts to improve the performance of its Medicaid business after posting $6.7 billion in losses in 2025, as elevated medical costs and market pressures weighed on results.

CEO Sarah London said the company is “laser-focused” on restoring sustainable profitability in Medicaid while maintaining quality outcomes.

Speaking on Centene’s earnings call on Friday, London told investors that performance in the latter part of 2025 showed signs of improvement. The company reported a fourth-quarter medical loss ratio (MLR) of 93% in Medicaid, in line with expectations set in October and an improvement from earlier in the year.

London said utilization trends seen in the third quarter largely continued into Q4, with behavioral health emerging as the largest cost driver. Home health services and high-cost pharmaceuticals also contributed to utilization pressures during the second half of the year. Despite increased flu and respiratory illness activity late in 2025, Centene said Medicaid utilization remained within expected ranges.

“As an organization, we have been laser-focused on restoring our Medicaid business to sustainable profitability,” London said during the call.

Centene outlined several strategies aimed at stabilizing its Medicaid operations. These include optimizing provider networks, implementing new clinical programs, and working with state partners on rate-setting and policy reforms to address rising costs. The company is also stepping up efforts to identify and prevent provider fraud.

One example cited was Centene’s Applied Behavioral Analysis (ABA) task force, launched in 2025. The group analyzed data across Centene’s 29-state Medicaid footprint and identified anomalies, including prolonged therapy durations beyond clinical guidelines and gaps in oversight of behavioral health technicians. The findings are being used to inform discussions with state partners and guide new ABA-focused care programs.

For the fourth quarter of 2025, Centene reported a net loss of $1.1 billion. The company’s overall MLR for the quarter was 94.3%, up from 89.6% a year earlier, reflecting higher morbidity in Affordable Care Act marketplace plans and changes to Medicare Part D under the Inflation Reduction Act. Full-year MLR rose to 91.9%, compared with 88.3% in 2024.

Despite losses, revenue continued to grow. Centene posted $49.7 billion in revenue in Q4, up from $40.8 billion a year earlier, and full-year revenue of $194.8 billion, compared with $163.1 billion in 2024. Membership stood at 27.6 million at year-end, including 12.5 million Medicaid members.

Looking ahead, Centene expects earnings per share of at least $3 in 2026, with projected revenue between $186.5 billion and $190.5 billion.

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